[ISC] Q. 7 Solution of Goodwill TS Grewal ISC 2023-24 Edition
Step-by-step solution of Question 7, Chapter 2 Goodwill: Concepts and Mode of Valuation, TS Grewal Class 12 Accountancy 2023-24 for the ISC Board.
Question 7
Sumit purchased Amit’s business on 1st April, 2023. Goodwill was decided to be valued at two years’ purchase of average normal profit of last four years. The profits for the past four years were:
- Year Ended 31st March, 2020 — ₹ 80,000; 31st March, 2021 — ₹ 1,45,000; 31st March, 2022 — ₹ 1,60,000; 31st March, 2023 — ₹ 2,00,000
Following information was taken from the books of account:
- (i) Stock theft (Abnormal loss) of ₹ 20,000 was debited to Profit & Loss Account for the year ended 31st March, 2020.
- (ii) A fixed asset was sold on 1st April, 2020 and gain (profit) of ₹ 25,000 was credited to Profit & Loss Account.
- (iii) In the year ended 31st March, 2022, assets of the firm were not insured due to oversight. Insurance premium not paid was ₹ 15,000.
Calculate the value of goodwill.
Solution
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About this solution
This is Chapter 2 Goodwill of ISC TS Grewal Edition 2023-24.
Written by Vijay Adarsh, teaching commerce since 2003 to Class 11, Class 12, B.Com, CA, CS and CMA students.
We have solved all the practical questions in this book and explained them Step by Step in detail with clear working notes.
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